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Trump Suggests US Could Slap 10 Percent Tax On iPhones, Laptops From China (cnbc.com) 387

An anonymous reader quotes a report from CNBC: President Donald Trump suggested he could place a 10 percent tariff on iPhones and laptops imported from China, in an interview with the Wall Street Journal published Monday. He also said it's "highly unlikely" that he would delay an increase in tariffs from 10 percent to 25 percent on Jan. 1, just four days before a summit with Chinese President Xi Jinping. "Maybe. Maybe. Depends on what the rate is," the president said to The Wall Street Journal about the possible iPhone and laptop tariffs. "I mean, I can make it 10 percent, and people could stand that very easily."
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Trump Suggests US Could Slap 10 Percent Tax On iPhones, Laptops From China

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  • by Plus1Entropy ( 4481723 ) on Monday November 26, 2018 @10:38PM (#57705532)

    Sure, everyone could handle a 10% tax very easily. Oh unless you're super rich, then you need a tax cut.

    Either that, or just secure a small million dollar loan from your daddy.

    Our President is a stuck up, toffee nosed, elitist twat.

    • by Anonymous Coward

      Apple could easily afford to drop the price 10% too. I feel like they are at the top of what folks are willing to pay. Early on i would just upgrade when i felt the need... now i give it a lot more thought... and im sure im like most slashdotters, i can afford to upgrade unlike most of my friends and family. I say bring in the 10%, if that moves some of the manufacturing to the USA or even just North America its a win

      • Why would it? Unless you can also lower the security and environmental standards to the dangerously low levels you find in China, 10% are a far cry from what you'd have to pay more for domestic production.

    • Since Tim Cook took over, prices have been going up. On top of that, exchange rates make these increases even worst. If you add an Orange Tax on top of both of those, it means Apple products would cost nearly twice the competitors products.

      I don't mind paying a little extra to be able to use macOS, but at these prices all he's doing is pushing people to Linux and BSD while at the same time loosening our dependance on Intel and AMD later on.

    • Poor people aren't buying them as it is. Rich people can handle another $100. Or they can just go with a Korean phone.

      • Most people who buy iphones are poor people who want to appear rich. It's an insecurity thing. Most rich people I know don't have an iphone. They don't feel the need to prove their status the same way as an insecure poor person.
      • by AmiMoJo ( 196126 ) on Tuesday November 27, 2018 @04:27AM (#57706394) Homepage Journal

        It's not just iPhones that the tax is going on. Pretty much all phones will be affected.

        Trump's policy is attrition. He's hoping you can stand the pain longer than China.

        He is hoping that China will capitulate, but because China is not a democracy it can simply wait a couple of years to see what happens.

        • You know what...I'm okay with playing that game of chicken. If we win it, better for us. If the Chinese do, then that's OK too. Better than the self-imposed death by a thousand cuts that "one way free trade" with China over the past twenty years has imposed on us.
          • by AmiMoJo ( 196126 )

            There is another option. New trade deal with China, push for them to open up. Maybe get the EU on board with it, present it as a multilateral offering.

            It's not as immediate or visceral but it might actually work.

    • Our President is a stuck up, toffee nosed, elitist twat.

      Elitists are people who know lots of things, not people who have lots of things.

    • by grasshoppa ( 657393 ) on Monday November 26, 2018 @11:41PM (#57705780) Homepage

      He's not wrong; iPhones are a luxury item. If you can't afford the hike, you shouldn't be buying one to begin with.

      • That's insane. There's a price that everyone is willing (and able) to pay for an item. You may be able to afford a $1000 phone, but not a $1100 one. And, knowing that price point, is the start of financial literacy. Your statement is the start of going to the poorhouse/overpaying at auctions.

      • He's not wrong; iPhones are a luxury item. If you can't afford the hike, you shouldn't be buying one to begin with.

        So are all of the most popular Android phones and the same applies to them since they are also made in China and expensive as hell. The 64Gb iPhone X sells for $1000 the new Samsung S10 entry level model is slated to sell at at $750, cheaper but not exactly affordable either and they are all made in China so why just tax the iPhone? These things are now costing more than an Ultrabook laptop on Amazon so somebody remind me, why should I pay $750+ for an entry level 64Gb smartphone (irrespective of which Mobi

    • by sit1963nz ( 934837 ) on Monday November 26, 2018 @11:56PM (#57705820)
      I wonder if the clothes etc Trump buys in from China for his own golf courses will see a 10% tariff, same with the stuff Ivanka sells.... nah no tariff on their stuff.
    • by mycroft16 ( 848585 ) on Tuesday November 27, 2018 @12:18AM (#57705904)
      Trump is trying to play this like zero sum game in which he wins and everyone else loses. In economics that's a really stupid way to do things because if everyone else loses who is buying all the stuff you're winning at making? No one. Oops, you collapse as well. Sure China has some rather aggravating trade practices and corporate espionage seems like a regular old Tuesday over there... but you can't just go slapping tariffs on everyone and everything without some serious repercussions that he seems incapable of grasping. China needs the same things it needed before the trade war, and it's going to start looking elsewhere for them, and set up new trade agreements with other countries for those things. And when the trade war settles and the dust clear and the US is exporting stuff again to them... are they going to buy it, or stick with their new trade partners? Historically it has always taken YEARS to re-enter a market that a trade war has pushed us out of. Or anyone for that matter. And since China seems more than happy to just sit and wait for Trump to rot, this is not going to end well for him.
      • Trump is trying to play this like zero sum game in which he wins and everyone else loses. In economics that's a really stupid way to do things because if everyone else loses who is buying all the stuff you're winning at making?

        Trump doesn't care because he doesn't profit from making things, he profits from scamming people. As long as there are wealthy dumbshits, Trump can still scam. And since the most important criteria in economic success is the social status of your parents and not how intelligent you are, there are plenty of stupid people with lots of money.

    • by Actually, I do RTFA ( 1058596 ) on Tuesday November 27, 2018 @02:07AM (#57706136)

      Either that, or just secure a small million dollar loan from your daddy.

      Please stop repeating this lie. I know, it sounds like it's making fun of Trump, but it's actually buying into his hype. His trust fund was paying him over $250k a year (inflation adjusted) every year since he was born. His dad bought him his first apartment complex. His dad loaned him (illegal) $3 million (not inflation adjusted) dollars when his casino was going bust. He inherited somewhere north of a half a billion dollars (and some estimates go to multiples of it).

      To end up where Trump is, even starting with a million dollar loan, is impressive. To end up where Trump is with where he actually started is about as impressive as... well, inheriting money and living off the interest.

      • To end up where Trump is with where he actually started is about as impressive as... well, inheriting money and living off the interest.

        It's actually less impressive than that. If he had simply held onto his real estate holdings and done nothing but rent them he would be worth more today than he actually is. He's been outperformed by the S&P 500, or more amusingly, by Paris Hilton.

    • Sure, everyone could handle a 10% tax very easily. Oh unless you're super rich, then you need a tax cut.

      People who buy the latest iPhone for cash sure act like they are super rich...either that, or dumb. They'll absorb the 10% price increase no problem. It's not like they weren't paying over $1000 for a phone anyway...

      Those who get an iPhone as part of a carrier plan won't notice the extra dollar per month or whatever.

      Slapping a tariff on every laptop however is a different beast enitrely...a lot of those things are budget machines with razor-thin margins. People who buy them look after every $10 spent...this

    • Sure, everyone could handle a 10% tax very easily. Oh unless you're super rich, then you need a tax cut.

      Bad news: yes, everyone buying an iPhone could afford a 10% tax on it. It's not like the 10% is on everything you buy if you own an iPhone. Nor is it retroactive if you already own an iPhone....

      So, worst case if you use iPhones: you pay an extra hundred or so for it, however often you buy a new phone. Which really shouldn't be more often than every three or four years, unless, of course, you're rich

    • Comment removed based on user account deletion
  • There isn't any tax that a Republican doesn't like.
    • Re: (Score:3, Insightful)

      by Tablizer ( 95088 )

      Politicians of both parties are quite flippy-floppy on taxes, debt, war, regulation, immigration, spending, ally selection, states-rights, etc. as it serves their short-term political goals. This is largely because the average voter has a short memory.

      • by 110010001000 ( 697113 ) on Monday November 26, 2018 @11:18PM (#57705684) Homepage Journal
        What were we talking about? Oh yeah, Democrats love their taxes.
      • It's more true that politicans disagree on all those points even within a political party. And people try to say "All X believe Y" from a small sample. And then other people say "All X believe not Y" from a similarly small, nonoverlapping sample.

        Oh, politicians sometimes move around what they care about, but they tend to be pretty consistent. With the nuance that surrounds debt. Politicians seem to consistently believe debt is okay for either priorities, but not for not-their-priorities. Which is a fan

      • by rtb61 ( 674572 )

        The average voters memory was a short as the news media cycle and controlled by that corporate propaganda main stream media. Of course now the internet, the average voter is reminded of what ever hurts shite politicians the worst upon a regular bloody basis. No fucking short term memory any more, proof of that the corporate whore lost with, corporate backing, the military industrial complex backing, corporate main stream media backing, tech media backing and the most money and lost, lame as fuck, the corpor

  • by Anonymous Coward on Monday November 26, 2018 @10:44PM (#57705560)

    Perhaps you missed the obvious, but he's already bailing out US farmers to the tune of $12 billion to compensate for lost sales to China.

    Worse, he's paying it to Chinese owned companies like WH Group:

    https://www.washingtonpost.com/business/economy/chinese-owned-pork-producer-qualifies-for-money-under-trumps-farm-bailout/2018/10/23/154764da-d3ce-11e8-83d6-291fcead2ab1_story.html

    And if he slaps a big tarif on Apple, they'll demand compensation too. Either directly or through the courts, since he's not within the Executive branches *limited* powers to kill ratified trade treaties wholesale. Apple can sue if they don't get compensated.

    Also imagine how it would be if Apple does not get compensated, yet Chinese companies do get compensation from Trump?

    IMHO, the US $ nearly collapsed after Bush did his 2004 monetary inflation. Here they're doing a 10% increase in money supply, gifted as tax cuts to rich people (around $1.5 to $1.9 trillion). That needs to be anchored in trade since you need China to need to buy US bonds to soak up the debt and force the retained $ value.

    IMHO2: Ukraine is about to be invaded by Russia, and we'll get a lot of distraction like this.

    • Russia may or may not invade Ukraine, but the spat at the Kerch Strait was not a sign of Russia getting ready to do so.

      Russia is slowly strangling the Ukraine economy on the sea of Azov and Ukraine send in those ships in the hope an incident would get international help. If they don't get it, Russia will just return to strangling them.

    • by Aighearach ( 97333 ) on Tuesday November 27, 2018 @02:27AM (#57706192)

      In the United States, you can't discriminate against a US person or a US company based on country of origin.

      That is one of the things involved in the trade dispute; anybody in the world can open a US company, or buy one, but Americans can't open a branch in China and do business there without creating a joint partnership.

      That is clearly imbalanced and unfair. Personally, I think it is silly to fight a trade war over it; it would be better for a President to fight a legislative war with Congress over the rules, and try to get them to establish parity-based rules for foreign access to our markets. But Trump wants to fight a trade war over, so that is what we're doing. But clearly, under existing law, you can't give aid to US companies with conditions attached to country of origin of the owners.

      And that's actually fine for the trade war, because only a tiny number of US ag. business is Chinese owned.

      Everybody wants to buy US bonds, you don't need China for that. Their desire for purchases only cause the market to be less profitable for everybody buying. It doesn't even affect the US government.

  • Do it. (Score:2, Interesting)

    by Anonymous Coward

    If you're wealthy enough to purchase an iPhone, you're wealthy enough to pay this tax. If not, I guess Apple is going to lose a number of customers.

    Plus, this effectively also serves as a corporate tax given that iPhones are fairly common for commercial use.

    This may end up being a fairly progressive tax.

    • You don't need to be wealthy to buy an iPhone, you just need to have $1000 in your pocket and bad decision-making skills. I know a lot of poor people with iPhones.
    • Most people who have iphones get them on credit, eg a monthly contract. You don't even need to be wealthy to get that. Just very bad at managing your money efficiently
  • by Streetlight ( 1102081 ) on Monday November 26, 2018 @11:00PM (#57705626) Journal
    So, what does GM do - start the process of eliminating ~15,000 jobs and closing factories. I know, it's more complicated than that in that competition for foreign car makers, most of whom make cars in the US with likely higher quality products, changes in customer preferences to SUVs and trucks, and the availability of hybrid and electric vehicles from other companies. Another example is Ford's decision not to make a car for import to the US from China and rejecting the suggestion that it be made in the North America because it would cost too much.

    No one wins from a trade war.
    • by Pentium100 ( 1240090 ) on Tuesday November 27, 2018 @12:45AM (#57705972)

      And only the rich win from open trade and being able to screw the local workers.

      So, since it's a lose-lose proposition for me, I'd rather see the rich lose too.

      Also, people talk about how we should take care of the environment, governments pass laws that forbid dumping toxic waste into a river etc. However, you can always open a factory in China, produce as much CO2 as you want, dump as much toxic waste into rivers as you want, that will allow you to make the product cheaper and you will out-compete the local factories that have to use expensive equipment to clean out their waste and reduce their CO2 emissions. Being able to use child labor and no need to care about workplace safety is also great. After all, what matters more than the income of shareholders?

      • only the rich win from open trade and being able to screw the local workers.

        That's not true. Open trade increases the production possibilities frontier.

        Let's say you can produce 5 tonnes of potato or 3 tonnes of grain with the same labor-hours. Another country can produce 3 tonnes of potato or 5 tonnes of grain with the same labor-hours. Your labor-hours might be 40 and theirs 50, but that doesn't matter.

        If you produce 10 tonnes of potato and they produce 10 tonnes of grain, you can trade, and each of you can have 5 tonnes of potato and 5 tonnes of grain while investing the

    • "No one wins from a trade war."

      Have you seen the sorry state of the American economy? At this point, there's no possible way we could lose the trade way harder than we're already losing it.

  • that people get all sideways about a 10% tax on imported phones, but when we lower corporate tax rates from 35% to 21%, which will lower the price of AMERICAN goods, then its supposedly a "tax cut for the rich." What's rich about millions of phone buyers that could get an American phone for less money because the company is not sending so much $$$ to Washington, and can therefore lower the price on their phones and cause more people to choose their phones instead of the Chinese phones? Taxes are taxes, w

    • by Krishnoid ( 984597 ) on Monday November 26, 2018 @11:34PM (#57705762) Journal

      but when we lower corporate tax rates from 35% to 21%, which will lower the price of AMERICAN goods

      "Yup, we'll do that. Just let us complete these juicy <drool>, sorry, share buybacks ... sorry, this is gonna take a couple quarters for our finances to even out. Let us get back to you in a bit."

    • Re: (Score:3, Insightful)

      by Anonymous Coward

      There is no evidence that lowered corporate taxes lowers the price of American goods. Lowered corporate taxes this time seem to have been used for stock buybacks, i.e. propping up market valuations. But don't let lack of evidence get in the way of corporate tax cuts because that wouldn't be AMERICAN.

    • by l3v1 ( 787564 )
      " millions of phone buyers that could get an American phone"

      Well, good luck with that. American phone, right.
    • by Actually, I do RTFA ( 1058596 ) on Tuesday November 27, 2018 @02:25AM (#57706180)

      First, most products are not priced based on cost, but on the market power of the sellers. Most goods compete on non-price attributes.

      Second, taxes aren't just taxes. Tariffs raise the costs of goods sold, which means that they increase the costs to sell products. Taxes on profits don't. Hell, EBITDA is the common gold standard for how good an investment is, and it specifically excludes (income) taxes. It's the "T". But it doesn't exclude tariffs.

      • First, most products are not priced based on cost, but on the market power of the sellers. Most goods compete on non-price attributes.

        Products are priced based on cost. Market power allows for higher profit margins.

        A commodity product will have an extremely-low barrier to entry. If you have $1M of sales per year in the whole market and you need $0.5M to be viable, a new competitor needs to capture 50% of the market. If there are $1,000M of sales per year in the whole market, that new competitor only needs to capture 0.05% of the market.

        A product becomes commodity as its cost falls. It costs so much that, with a 0% profit margin,

  • Comment removed based on user account deletion
  • ... then doesn't that defeat the purpose?

    I mean, it just needlessly increases the cost of a good without giving anyone an incentive to move manufacturing into the USA because it's less expensive to just pay the tax than build entirely new domestic infrastructure that would in the long run, cost more anyways because of the costs of recovering those infrastructure costs.

    Of course, the problem with all of this is that long before you've applied any tax high enough to create such an incentive, you will have already created another incentive for a black market that will present its own problems.

  • by Rick Schumann ( 4662797 ) on Tuesday November 27, 2018 @02:17AM (#57706166) Journal
    ..with it's throttle stuck wide open.

    For fucks' sake, I fully understand that China is so corrupt and screwing us (and other countries) over, in more than just trade (militarily, human rights [comma, lack of], and so on, and so on) but there's got to be a better way to handle this than this.

    Of course you also have to admit: we're like spoiled-assed kids in this country. Our overall high standard of living is because everything has been so damned cheap for so many decades. You all complain about the cost of an iPhone, but if it was produced 100% here in the U.S. (from the smallest component on up), it would cost several times as much I'm sure, assuming they'd produce them at all (might be too expensive to produce in any quantity). Before anyone jumps my shit for that: without U.S. companies using Chinese companies for production, Chinas' economy would probably be absolute shit. So it is a two-way street -- but still there's got to be a better way to deal with this than what Trump is doing. He keeps trying to run a country like it's a business -- and he's not a good businessman to start with (vis-a-vis, all his bankruptcies and failures), and it's just a bad idea to run a country like it's a business anyway. He's achieving the opposite of what was intended: he's costing Americans money, he's destroying American jobs, and he's running American companies out of business. Do I have a better idea? No. If I did, I'd run for office. But someone else must have a better way to do this, and they're not stepping up -- or maybe they've been told to shut up.
  • I live in Europe. If the US wants to charge more for iphones I'll happily buy direct from China. Bye bye Apple, Hello Xiaomi
    • Uhm, the tariff would only apply to iPhones imported *into* the US. It would only increase the cost of iPhones within the US. Apple would probably pass the tariff on to the US consumer.

      Tariffs on goods imported into US will only affect the rest of the world if they are re-exported. The rest of the World can happily keep buying iPhones from apple "assembled in China" at the same price as before.

  • Go for it (Score:4, Interesting)

    by stealth_finger ( 1809752 ) on Tuesday November 27, 2018 @05:38AM (#57706568)
    Maybe pissing off the iCrowd will be the last straw.
  • ...it was about time. The reason RCA isn't making anything in the US anymore is because China slaps a tarrif on anything imported from the US but the US doesn't slap a tarrif on Chinese imports.
  • by Opportunist ( 166417 ) on Tuesday November 27, 2018 @07:25AM (#57706846)

    Up the tariff! Create domestic jobs!

    Huh? No, not in production. In repairing and second hand sales. Because when a new phone costs about 2000 bucks, repairing your old one for 100 suddenly becomes very compelling.

  • by turp182 ( 1020263 ) on Tuesday November 27, 2018 @07:42AM (#57706904) Journal

    In a trade war both sides raise taxes/tariffs. These, at least in the US are collected by the Treasury and go into the general fund.

    So:
    * Citizens purchasing foreign goods pay more (tariff is a tax)
    * Companies importing raw materials (for example, steel and aluminum) pay more (tariff is a tax), and will have to charge more for products (indirect tax)

    The goal of course is to move manufacturing into the US.

    But wage disparities cripple this in many cases. We could probably handle things like chip manufacturing competitively, but putting things together via humans is far more expensive in the US. Maybe robots are the answer (they are).

    The problem to me is timing. It takes a long time to move the product and processes the tariffs are targeting. And raw materials? Wage disparity again.

    Anyway, the tariffs are just a way to increase Federal income, from March through July it was about $1.4 billion from steel and aluminum:
    https://www.cnbc.com/2018/08/1... [cnbc.com]

    And per the Congressional Budget Office's Monthly Budget Review, "Other Income" was up by $1 billion (includes tariffs), about 1%. Corporate taxes dropped by $92 billion, about 31%.

    https://www.cbo.gov/system/fil... [cbo.gov]

    Anyway, corporate tax rate drop was a gift to the already wealthy ($92 billion!) and the tariffs are a tax on the citizens and revenue for the Federal government.

  • Billionaires (Score:5, Insightful)

    by Tomahawk ( 1343 ) on Tuesday November 27, 2018 @08:07AM (#57707008) Homepage

    This is what happens when you put a billionaire in the White House. He has no idea that 10% is a huge amount for many people (let alone 25%!).

    Next time, guys, put a poor person, or even a homeless person, in there. Someone who has some concept of the value of $1.

    • This is what happens when you put a billionaire in the White House. He has no idea that 10% is a huge amount for many people (let alone 25%!).

      Next time, guys, put a poor person, or even a homeless person, in there. Someone who has some concept of the value of $1.

      He's worth substantially less than 1 billion. Trump would like to believe his net worth is in the billions.

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